DBRS Anoints Peru as High Grade (1)

Peru got a shot in the arm Friday with a promotion to investment grade by DBRS, the Toronto-based rating agency. The agency gave it a BBB (low) with a stable outlook and lauds the country’s sustained economic growth and declining debt burden within a framework of fiscal discipline and sound monetary policy. “Peru’s high reserve levels, low debt-service requirements and flexible exchange rate provide an adequate cushion to absorb potential external shocks during the administration of President Alan García,” says DBRS. Gross public debt-to-GDP has declined from 47% in 2003 to less than 30%, due to fiscal prudence, adept liability management and high GDP growth, it adds. The government’s target is to reduce it to 25% of GDP by 2010.